Make us your home page

Vindication comes at a high cost for Jabil

To St. Petersburg electronics manufacturer Jabil Circuit Inc., it's been the equivalent of the Spanish Inquisition. For two years and eight months, Jabil has been under suspicion of backdating stock options for its executives to maximize their personal financial gains. Now it's finally over, it appears.

"There was no backdating," Jabil CEO Tim Main told the St. Petersburg Times back in 2006. Main has maintained his company has been the victim of a "witch hunt" by the Wall Street Journal, which on March 20, 2006, named Jabil and five other companies, raising suspicions about the timing of stock option grants. Reacting to that Journal story, the Securities and Exchange Commission and the U.S. Attorney's Office launched inquiries into the stock options practices at Jabil Circuit.

In a conversation at Jabil headquarters during the SEC investigation, Main told me that the SEC threat and the vague allegations had hurt the morale at the company — a 75,000-employee business with worldwide operations and, frankly, plenty of accompanying pride. Jabil executives spent a ton of money trying to defend or at least explain its stock options plan to the SEC and lamented the distraction away from its competitive industry.

Jabil has acknowledged some administrative errors. And it also settled a resulting class-action lawsuit filed in the U.S. District Court in Tampa that represented investors who purchased Jabil securities between Sept. 19, 2001, and June 21, 2006. A federal court judge dismissed the suit in April 2008 after Jabil agreed to change its compensation policies and pay out $700,000 to cover attorney's fees for the plaintiffs.

On Tuesday, Jabil announced the unusual: The SEC had specifically told the company the inquiry was over. That does not happen often. Here's what the company said:

"Jabil announced that it had received a letter from the SEC Division of Enforcement advising that the Division had completed its investigation and did not intend to recommend that the SEC take any enforcement action."

If the champagne is not flowing at Jabil's headquarters, then at least there must be some grim satisfaction that the regulatory nightmare appears to be over. Coincidentally, Jabil stock traded over $40 a share in early 2006, just before the Journal's claims of backdating shenanigans. Jabil shares now trade under $6.

Not all companies accused of backdating stock options have fared so well. Earlier this year, a plea agreement was filed in federal court indicating Henry Samueli, a founder of Broadcom, would plead guilty to lying to the SEC during an inquiry into the backdating of stock options at the computer chip maker. At another of those companies, three former executives of software company Comverse Technology Inc. were charged for their roles in orchestrating a long-running scheme to manipulate the granting of millions of Comverse stock options to themselves and to employees.

Robert Trigaux can be reached at [email protected]

Vindication comes at a high cost for Jabil 11/26/08 [Last modified: Friday, November 28, 2008 7:20pm]
Photo reprints | Article reprints

© 2017 Tampa Bay Times


Join the discussion: Click to view comments, add yours

  1. Tampa's streetcar system looks to expand north through downtown


    TAMPA — The TECO Line Streetcar system that runs from Ybor City to the Channel District could be extended north through downtown all the way to Tampa Heights, according to the latest update of a $1.7 million study aimed at expanding the streetcar system.

    Riders take in the last few stops of the streetcar route in Ybor City during the tenth anniversary celebration of the TECO line streetcar system in Tampa in 2012. Now officials are looking for ways to expand the service north through downtown to Tampa Heights. [EVE EDELHEIT  |  Times]
  2. Tampa Bay small businesses give Tampa B+ for regulatory climate


    In a recent survey about small business sentiments toward state and local government policies that affect them, Tampa Bay ranked at No. 25 out of 80 — a B+ overall.

    Tampa Bay ranked No. 25 out of 80 in a recent survey about how small business owners feel about state and local government policies that affect them. | [Times file photo]
  3. Seminole Heights restaurants face struggles amid killings, post-Irma

    Food & Dining

    TAMPA — The neighborhood's hip circle of popular, well-regarded restaurants is feeling the squeeze in the wake of a recent killing spree. And the timing is rough.

    Ella’s Americana Folk Art Cafe has been taking precautions in light of the Seminole Heights killings: keeping the lights on all night and having employees walk to their cars in groups.
  4. St. Pete-Clearwater holding food, supply drive for hurricane refugees


    CLEARWATER — St. Pete-Clearwater International Airport and Allegiant Air are holding a food and supply drive for the Hispanic Outreach Center in Pinellas County. The event, which will benefit refugees displaced by Hurricane Maria, will be held Tuesday from 5 p.m. to 8 p.m. at the airport at 14700 Terminal Blvd.

    St. Pete-Clearwater International Airport and Allegiant Air are hosting a food and supplies drive Tuesday for refugees displaced by Hurricane Maria. | [Times file photo]
  5. Tallest building in Pinellas County in search of a new name

    Real Estate

    ST. PETERSBURG — The name "Priatek" is gone from Pinellas County's tallest building, perhaps to be replaced by that of a much better-known company new to the Tampa Bay area.

    The Priatek name is off of downtown St. Petersburg's tallest building.
 [LARA CERRI  |   Times.  2015]